Your company is considering the purchase of several trucks.
The annual yield-to maturity quoted for the bonds issued XZYY, Inc., is 10.02 %. Calculated by taking the $1127 current market price and 10% stated coupon rate into consideration, this yield represents a return of 10.02 percent. The consideration of any potential call features – in this case allowing them to be redeemed at 112% of par value after 4 years -should also be factored into equation as these provide additional return opportunities to investors.
For the exact amount, we need to first calculate present value for all cash flow associated with an investment. This is the semi-annual coupon payment (10% divided between 2) multiplied 22 times plus face value (1,000 dollars) at maturity. Then discount this back using an appropriate discount rate. This then can be converted into an internal rate of return (IRR) which reflects true percentage earned on investment over entire period adjusted for inflation & time based on assumptions made.
In conclusion then it appears that XZYY, Inc’s bonds have a quoted annual yield-to-maturity of 10.02%, making them an attractive option for those looking for steady income stream from fixed interest securities with added bonus being ability to redeem before term expiration should market conditions warrant such action meaning investors can potentially enjoy higher returns than initially anticipated too.